August 16th, 2002 - E-Pass Washington

E-Pass Will Appeal Summary Judgment

E-pass Announces It Will File An Appeal Of Judge Jensen’s Summary Judgment In Favor Of Defendants, Palm And 3com, to The United States Court Of Appeals For The Federal Circuit In Washington.

            E-pass filed suit in February of 2000, alleging that Palm handheld devices were being operated according to the steps of plaintiff’s U.S. ‘311 patent, an infringement.  On July 12, 2002, Judge Jensen, of the U.S. District Court, N.D. California heard two cross motions for summary judgment, upon submission of written documents without benefit of oral argument, E-pass’s motion seeking a judgment of infringement and Palm & 3com’s motion  seeking a judgment of non-infringement.   On August 13, 2002, Judge Jensen denied the E-pass motion and granted defendants’ motion.    E-pass is preparing the papers for filing an appeal to the U.S. Court of Appeals for the Federal Circuit, a specialized court which hears all appeals of patent cases in the United States.

            E-pass notes that the opinion of Judge Jensen is replete with error, and for that reason will aggressively pursue the appeal and enforcement of its patent which, among other things, concerns itself with a method for using a handheld computer in e-commerce.

            Among the most glaring and blatant errors in Judge Jensen’s opinion, (there are many more, which will be placed before the Court of Appeals in Washington), are the following:

1.      Judge Jensen erroneously concludes that E-pass has established that Palm handheld devices are the equivalent of the E-pass “commercial embodiment”, as opposed to the e-pass patent.  (Jensen’s opinion, p. 15, lns. 4-9).   The judge correctly stated that the comparison must be between the patent and the accused device.    (Jensen’s opinion, p. 15, lns. 1-9).  The comparison before the court, however, was in fact, a comparison of the E-pass patent and the Palm device.   There is not and there never has been an e-pass product, nor any e-pass “commercial embodiment”, nor was there any evidence or suggestion to the court that the comparison it was looking at was anything other than with the e-pass ‘311 patent, itself.

2.  Based upon the erroneous conclusion that the comparison before it was between an e-pass product and Palm product, the court writes that the fact that neither made use of  a magnetic stripe to enable use with ATM’s and point of sale magstripe readers meant that the e-pass product was not covered by its own patent, (Jensen, p. 14 ln. 26 – p. 15 ln. 24).     Judge Jensen holds: That the owner of the ‘311 patent has built a device that cannot, itself, be used as a true substitute only suggests that that device does not conform with the patent. (Jensen, p. 15, lns. 21-24, emphases in original).  There was no evidence that e-pass “built” any device.  E-pass did not build any device.    The court was, in fact, actually looking at the patent, although it did not seem to realize that important fact.   It is the patent that states:    Another advantage of the electronic multi-function card (EMFC) according to the invention lies in the fact that there is no need for the magnetic stripe….   (e-pass U.S. Patent  5,276,311, at col. 7, lns. 35-37).  There is no use of a magnetic stripe in any of the ‘311 patent claims.

3.  The court makes mention of two videos in evidence, (Jensen p. 11, ln. 10), where both Palm’s former CEO Mr. Yankowski, and its chief engineer, Mr. Solomon independently demonstrate using the Palm handheld as per the steps of the e-Pass method patent.  After acknowledging having received that evidence, created by Palm’s own executives, the court makes no further mention of it, ignores its impact, and turns its focus instead on a software product that had been brought to the court’s attention for further illustration purposes only, Ilium company’s eWallet^® software. (Jensen, p. 11, lns. 7-17).

4.      The court fails to understand that evidence as well.  E-pass brought the Ilium eWallet^® software to the court’s attention, by way of exhibit to its papers, purely for unnecessary but nevertheless relevant additional support for its summary judgment motion, and for opposition to the Palm motion.  The court, without any basis, concluded that e-Pass has not proven that this eWallet^® software had ever been used on a Palm (Jensen p. 11, lns. 17-19).   The eWallet^® website, which had been placed before the court as an exhibit, specifically states: Use Ilium Software eWallet^® on your Palm V, Palm III, Handspring Visor, Palm VII, IBM Workpad, TRGPro Handheld, Palm m100, and all new Sony CLIE models and HandEra 330. (http://www.iliumsoft.com/walletp.htm)

5.  The court correctly stated that  the standard for deciding summary judgment motions as a matter of law, as opposed to submitting the case to the jury, is whether there is a material issue of fact,  (Jensen p. 4, lns. 5-10), not whether that issue was proven by either side.   The court also correctly stated that it is not the court’s job to determine proof of the fact in issue, but rather, it is the obligation of the court, in deciding the motion, to draw all inferences in favor of the non-moving party.   (Jensen, p. 4, lns. 24-27).    Then, in conclusion, rather than drawing from the evidence in favor of e-Pass,  the court decides the summary judgment motion in favor of Palm, concluding not that e-Pass has failed to present evidence and arguments, the credibility of which is for the jury, but rather concluding that e-Pass has failed to “prove” infringement (Jensen p.16, lns. 2-4).

6.      The court then makes further error in commenting on a single piece of evidence of prior art, the “Sharp Wizard” which the court states was capable of performing some of the steps of the ‘311 method claim. (Jensen, p. 12, ln. 26 – p. 13, ln. 10).  First, that is immaterial to a motion for summary judgment on the issue of infringement.  Second, it shows a further error in applying U.S. Patent law.  The e-pass patent claim being asserted against Palm and 3Com is a method claim, which can only be infringed by practicing the steps of the method, and which can only be invalidated, by what is referred to in patent law, as “anticipation”, by practice of each and every one of the steps prior to the invention.  Whether or not there was a device, such as the “Sharp Wizard” capable of being used according to each step in the patented method, is irrelevant.  Capability does not equal use, and capability does not invalidate a method patent.  (35 U.S.C. 102).   Indeed, it is e-pass’ position that the “Wizard” was not capable of being used to practice each step, but that too is not relevant for the infringement issue that was before Judge Jensen.